Resource World Magazine

a p r i l / m a y 2 0 1 5 www.resourceworld.com 37 Gold Bullion Development prepares for small-scale production by Laura Barker Gold Bullion Development Corp. [GBB-TSXV; GBBFF-OTC], a Québec-based precious metals mining and exploration company, is currently looking to initiate a small-scale mining operation on their 100%-owned Granada Gold property – a 'rolling start' pending approval of one outstanding permit. The property was acquired from Mousseau Tremblay Inc. in 2006 and was previ- ously explored by KWG Resources (late 1980s to 1995). The history of exploration and mining at Granada goes back to stak- ing in 1922 and mining of the LONG (Lots Of New Gold) Bars Zone from 1930 to 1935. Gold Bullion's corporate strategy, led by Chairman, President and CEO Frank Basa, has focused on explo- ration of past producing precious metal properties. The Granada property is 60 km 2 and located within the Abitibi Greenstone Belt approximately 5 km south of the estab- lished mining town of Rouyn-Noranda in northern Québec, with easy access to infrastructure and a labour force. The deposit is a sediment-hosted, structurally controlled mesothermal vein-type deposit. The Granada property has an established NI 43-101 (2012) resource of 7.81 million tonnes (Mt) measured gold grading 2.14 g/t gold (536,000 oz equivalent), 15.35 Mt indicated at 2.32 g/t (398,000 oz equivalent) and 8.6 Mt inferred at 2.23 g/t gold (617,000 oz equivalent). Historical production of 51,476 oz has been included in the resource statement. Roger Thomas, Director of Gold Bullion, stated, "Since the gold price has been a lot more volatile, we've decided to do a high- grade rolling start or a small production scenario: 1) to bring cash flow to the company to be more self-sufficient, and 2), to get a handle on the deposit which has a pronounced nugget effect. The rolling start will help evaluate this upgrading effect as first expe- rienced in our 140,000-tonne bulk sample from 2006." East-west trending quartz veins and stringers host gold min- eralization with free gold occurring at vein margins or within fractures of the quartz veins or sulphides. Late faults also host high-grade gold mineralization. The heterogeneous distribution of gold within the mineralized structures results in variable gold grades that produce the nugget effect. The current mine plan outlines operations for three years at 550 tonnes per day and features open pit, bulk tonnage mining of four shallow pits, starting in the historic LONG Bars Zone. A Preliminary Feasibility Study prepared by SGS Canada Inc. for Gold Bullion estimated all-in total cash costs for gold production is US $797 per ounce at an average ore grade of 4.24 g/t gold, using a cut-off grade of 1.69 g/t (corresponding estimated reserve of 569,000 tonnes, or 73,600 oz gold equivalent) and an Internal Rate of Return of 169% before tax. The payback period for the estimated $6.7 million capital expenditures for the rolling start is estimated at about seven months with an NPV of $24.65 million before taxes, discounted at 6% within three years. Gold Bullion entered into a three-year agreement with IAMGOLD Corp. [IMG-TSX; IAG-NYSE] in July of 2014 to trans- port (via truck) ore from Granada to IAMGOLD's Westwood mill for processing, located approximately 40 km east of the property. Further refinement and separation of metals is planned for com- pletion at the Royal Canadian Mint. Future exploration plans, upon cash flow generation, include expanded open-pit mining and infill drilling with initial targets extending down dip to the north for potential future under- ground operations. In 2014, Gold Bullion's exploration of the Granada site com- prised surface trenching and channel sampling. Their previous exploration included 90,000 metres of drilling between 2009 and the end of 2012. Currently, the company is developing an updated resource model from about 500 shallow historic KWG drill holes by re-sampling and validating the accuracy of KWG's reported grade. Project management of the Granada property is overseen by Claude Duplessis, President of GoldMinds Geoservices, while C.C. Consultants manages social responsibility undertakings and local com- munity relations. Gold Bullion has recently signed a Memorandum of Understanding with the local Timiskaming First Nations. Gold Bullion's other current asset is the Castle Silver Mine in Gowganda, northeast Ontario, located approximately 85 km northwest of the historic silver camp in Cobalt. The Castle Silver Mine was operational at various times between 1917 and 1989 before silver prices dropped. Gold Bullion had completed a small exploration program on the property several years ago, and is presently looking for a publicly-trading company shell they can acquire to spin the assets off as a separate company. n A view of the Gold Bullion's Granada gold mine located 5 km south of Rouyn-Noranda, northern Québec. Photo courtesy Gold Bullion Development Corp. MINING

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